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With the annual analysis of the quality of the location, Credit Suisse measures the attractiveness of the Swiss cantons from a business perspective. This year there was another change at the top. And Geneva is closing in on Zurich.
“Being still can mean going backwards,” says Jan Schüpbach. At Credit Suisse, the economist is responsible for the annual study of the quality of the location of the cantons. The current edition shows that cantons can lose ground if they leave their corporate taxes intact while others reduce their corporate tax rates. “This is the case, for example, in Obwalden and Nidwalden, which each lost two places as a result,” explains Schüpbach. Although Nidwalden decided to lower corporate income taxes at the end of September, this decision will only be implemented in early 2021. On the other hand, this year’s newcomers Geneva and Freiburg have significantly improved the tax appeal for legal entities.
At the top of the ranking this year, as expected, it moved. After Basel-Stadt was able to overtake Zug a year ago, the central Swiss canton regained the top position. After Zug and Basel-Stadt, Zurich, Geneva and Aargau follow (see graph). In the center of the field run by the canton of Lucerne, Basel-Landschaft, Schaffhausen and Solothurn can occupy two places each. With the second most important victory, a total of five rows, the canton of Friborg improved closer to midfield. At the end of the ranking, after years of stability, there was a rank change: due to slight improvements, especially in terms of tax attractiveness for companies, the canton of Jura relegated Valais to the end of this year’s location quality indicator .
A year ago it was foreseeable that Basel-Stadt would again lose its number one position, because the Zug tax cuts had already been decided but not yet implemented. “We already have so much greatness that we would treat the people of Basel first. The canton has done a good job, ”Zug CFO Heinz Tännler said at the time. On Tuesday Tännler said: “The current result shows that the canton of Zug is extremely strong as expected.” However, the advantage of the canton of Zug over Basel-Stadt is minimal, as the current ranking shows.
Attractiveness of company locations: Zug is back on top.
The crisis of the crown has no influence at the moment
If you just look at the tax factor, the cantons of Appenzell Innerrhoden, Nidwalden and Obwalden follow Zug. However, after tax cuts, many other cantons also offer attractive corporate taxes, so the relative advantage of lower corporate taxes has decreased.
Taxes are an important factor in the attractiveness of the location, but Credit Suisse also takes into account factors such as accessibility, especially transport links, and the availability of qualified specialists. According to Credit Suisse, the areas of tax attractiveness, availability of qualified employees and accessibility weighed about one third. With adjustments to corporate taxes, the field has come closer in recent years. “The differences are not as great as they used to be,” says study author Jan Schüpbach. Therefore, the other two factors, accessibility and availability of qualified workers, are likely to become more important in the coming years.
The crown crisis has no impact on the study at the moment. “The location quality indicator serves as a guide for companies and entrepreneurs evaluating different locations. The time horizon is three to five years, ”says Schüpbach. Therefore, the current crisis of the crown hardly plays a role in the ranking, but it could be that, if the crisis has long-term consequences for the economy, as seen today, the ranking will be affected in the future. “It is conceivable that certain cantons change their fiscal policy for economic reasons. That would lead to changes again, ”says Schüpbach.
Changes in fiscal policy have the greatest impact on the attractiveness of the location. This is where the cantons have the most room for maneuver. “It is costly and tedious to improve accessibility. And the cantons can only control the availability of skilled workers to a certain extent, ”says Schüpbach. Because most cantons did their homework over the course of the last corporate tax reform (Staf), he does not expect any major changes in the next few years, aside from the uncertainties related to Corona. “Zug and Basel-Stadt will remain at the top in the medium term,” he dares to hope.
Credit Suisse’s study “Location Quality: Zug on the outskirts of Basel-Stadt, Geneva approaches Zurich” is available here in German, French, Italian and English.
